Opinion
No. 502681/2013.
01-20-2016
Peter REBENWURZEL d/b/a Coney Realty Co., Plaintiff, v. Esther SWIECA and 201 Linden Blvd Partners, LLC, Defendants.
Alan B. Hertz, Esq., Brooklyn, Attorneys for Plaintiffs. Jacob S. Feinzeig, Esq., Brooklyn, Attorneys for Defendants.
Alan B. Hertz, Esq., Brooklyn, Attorneys for Plaintiffs.
Jacob S. Feinzeig, Esq., Brooklyn, Attorneys for Defendants.
CAROLYN E. DEMAREST, J.
The following e-filed papers read herein:
| Papers Numbered | ||
|---|---|---|
| Notice of Motion/Order to Show Cause/Petition/Cross Motion and Affidavits (Affirmations) Annexed | 17–33 | 34–59,61 |
| Opposing Affidavits (Affirmations) | 75–101, 103 | 62–73 |
| Reply Affidavits (Affirmations) | 105–122 | |
| Affidavit (Affirmation) Memoranda of Law | 104, 123, 60, 74, 102, 124 |
In this action by plaintiff Peter Rebenwurzel (Rebenwurzel) d/b/a Coney Realty Co. (Coney Realty) against defendants Esther Swieca (Swieca) and 201 Linden Blvd Partners, LLC (Linden Partners), Rebenwurzel moves, under motion sequence number one, for an order, pursuant to CPLR 3212, granting him summary judgment in his favor. Swieca and Linden Partners move, under motion sequence number two, for an order, pursuant to CPLR 3212, granting them summary judgment against Rebenwurzel dismissing all of the causes of action in his complaint.
BACKGROUND
Rebenwurzel is a duly licensed real estate broker in the State of New York. Coney Realty is Rebenwurzel's company, which is also duly licensed to transact business as a real estate broker and to be represented by Rebenwurzel. Although Rebenwurzel occasionally provides real estate brokerage services to clients, his primary business is the ownership, operation, and management of multi-family dwellings within New York City. Rebenwurzel is assisted in these business operations by his son-in-law Michael Haas (Haas), who is also is a duly licensed real estate broker in the State of New York. Haas supervises the day-to-day operations of Coney Realty.
Swieca is engaged in real estate investment in New York City, and, in or about October 2012, was searching for additional investment properties. At that time, Swieca met Rebenwurzel when he was introduced to her by Michelle Slochowsky Hering, Esq. (Hering), a landlord-tenant attorney, who provides services to Coney Realty and its affiliates. Since Rebenwurzel and Coney Realty were looking for investors for various deals and believed Swieca might be interested in acquiring multi-family dwellings in New York City, Rebenwurzel discussed his business strategy and experience with Swieca over a dinner one evening, which Hering and Haas also attended.
In November 2012, Rebenwurzel and Haas learned of a portfolio of properties, i.e., the Upper Manhattan and Brooklyn Multifamily Portfolio, which they believed would be of interest to Swieca. Haas contacted Swieca and, upon Swieca's instruction, through Hering, sent an agreement, entitled “Confidentiality Agreement” (the First Confidentiality Agreement), to Swieca's assistant, Shannon Fallon Doherty (Fallon), to whom Swieca had given the authority to sign agreements on her behalf. The First Confidentiality Agreement, signed on Swieca's behalf by Fallon, on November 19, 2012, contained terms requiring Swieca to hold the information received from Coney Realty regarding the properties in confidence. It provided in the preamble, as follows:
Swieca asserts that she did not actively use e-mail directly, and, therefore, communicated using e-mail through Fallon. She further asserts that she also gave Fallon the authority to sign agreements on her behalf using her name. Although Swieca attempts to avoid responsibility for the commitments set forth in the Confidentiality Agreements based on her own failure to read them, her authorization of Fallon to sign as her agent without review binds her to the terms set forth therein.
“C[oney] R[ealty] desires to disclose to [Swieca] certain information which is non-public, confidential or proprietary in nature for the purpose of evaluating a possible business arrangement. As used herein, Confidential Information' means all oral and written information concerning the Upper Manhattan and Brooklyn Multifamily Portfolio as identified in Exhibit A, which is provided to [Swieca] or to any of [Swieca's] affiliates or representatives by C[oney] R[ealty] at any time together with analyses, compilations, studies, notes or other documents, whether prepared by [Swieca] or by others, which contain or otherwise reflect such Confidential Information. Such Confidential Information also includes the fact that the parties are exchanging Confidential Information and engaging in discussions on a possible business arrangement.”
Paragraph 1 of the First Confidentiality Agreement provided that Swieca “shall hold such Confidential Information in confidence [and] shall use such Confidential Information only for the purpose of evaluating the entering into of a business arrangement with C[oney] R[ealty].” Paragraph 4 of the First Confidentiality Agreement provided that:
“Neither this Agreement nor the disclosure or receipt of Confidential Information shall constitute or imply any promises or intention to make any purchase of products or services by either party or its affiliated companies, with respect to the present or future marketing of any product or service or to enter into any business arrangement.”
After receipt of the executed First Confidentiality Agreement, information regarding the portfolio for sale was disseminated to Swieca by Coney Realty. Swieca then advised Rebenwurzel, via communications with Haas, that she was not interested in that portfolio of properties, nor was she interested in purchasing properties together with them, but, instead, was only interested in purchasing properties by herself. Rebenwurzel and Haas claim that, upon learning this, Haas then discussed the possibility of continuing to bring to Swieca's attention to potential real property investments in which she might be interested with Coney Realty acting as her real estate broker. They assert that they discussed Swieca's payment to them of a brokerage commission and hiring Coney Realty as her management company for any properties which she purchased.
Shortly thereafter, Rebenwurzel and Haas contacted Swieca regarding a second set of properties located at 1402 Avenue K and 964 East 15th Street, in Brooklyn, and, again, sent Swieca, via Fallon, a Confidentiality Agreement for signature (the Second Confidentiality Agreement). Swieca, by Fallon on her behalf, executed the Second Confidentiality Agreement on November 26, 2012. The Second Confidentiality Agreement contained the identical language set forth in the First Confidentiality Agreement except that it referred to the 1402 Avenue K and 964 East 15th Street properties, which was the subject of that agreement, and added the following language to the preamble:
“In the event that [Swieca] closes on these buildings C[oney] R[ealty] will be entitled to a broker's fee from [Swieca] and ... [Swieca] will hire C [oney] R[ealty] as the managing agent. These fees are to be negotiated by the parties.”
Rebenwurzel explains that, because he and Haas no longer expected Swieca to purchase properties together with them or Coney Realty based upon her prior conversation with Haas, this language was added to the Second Confidentiality Agreement in order to confirm their mutual understanding that Coney Realty would be acting as a buyer's broker and expecting to be hired as the managing agent for any property which Coney Realty would bring to her. Swieca denies any such understanding. She claims that she did not read the Second Confidentiality Agreement and just had Fallon sign it. She further claims that she believed that it was identical in all respects to the First Confidentiality Agreement and involved only terms regarding keeping the information about the properties confidential, and that she was completely unaware that it contained terms regarding her payment of a broker's commission to Coney Realty or hiring Coney Realty as a managing agent. As to this second set of properties, the owner took them off the market shortly after the information about them was disseminated to Swieca and, as a result, the proposed transaction with respect to them was not pursued.
About three weeks after the Second Confidentiality Agreement was signed, Haas contacted Swieca regarding a third set of properties located at 1290 Ocean Avenue, Brooklyn, N.Y. 11230 (the Ocean Avenue property) and 199–221 Linden Blvd Brooklyn N.Y. 11226 (the Linden properties). As had been previously done, Haas sent a confidentiality agreement (the Third Confidentiality Agreement) to Swieca, through Fallon, and Fallon signed it on Swieca's behalf on December 17, 2012. The Third Confidentiality Agreement contained the identical language as set forth in the Second Confidentiality Agreement except that it referred to property on Linden Boulevard and Ocean Avenue.
The Linden properties were two separate multi-family dwellings, one located at 201 Linden Boulevard (201 Linden) and the other located at 221 Linden Boulevard (221 Linden); the Ocean Avenue property was also a multi-family dwelling. The seller of the Linden properties was an entity that had the rights to purchase and sell a number of multi-family apartment buildings, including the Linden properties, whose principals were Steven Neuman (Neuman) and Israel Berger (Berger) (collectively the sellers). According to Rebenwurzel, he had initially considered acquiring the Linden properties and the Ocean Avenue property for himself when he learned they were for sale, but decided not to pursue this since the sellers needed the closing to occur within a short period of time, and he was unable to meet that requirement without other investors.
Haas disclosed the property addresses of the Linden properties and the Ocean Avenue property to Swieca, and she informed him that she was not interested in the Ocean Avenue property, but was interested in the Linden properties. In response to the Third Confidential Agreement, on December 18, 2012, Fallon sent Haas an e-mail asking “what['s] your commission on these deals?” Haas, on the same date, replied to Fallon's e-mail:
“Esty,
“I spoke to my father-in-law and usually we would take 2 points on the deal where you are dealing direct[ly] with the owner and there [are] no other brokers involved. [H]owever, given the size of the deal and that there is no one else involved other th[a]n me he felt that 1.25 was a fair number.
“As far as the management is concerned I spoke to my father-in-law as well. [I]deally we would do it for 5% of the Gross Rent Roll. [H]owever, given that you already indicated that you wanted 4.75% of the gross rent roll I would agree to that as well.”
Defendants did not respond to this e-mail. According to Rebenwurzel and Haas, they assumed that Swieca was in agreement with them as to these terms. In her Response to Plaintiff's First Set of Interrogatories No.3, Swieca admits that, on December 17, 2012, Haas mentioned to her that he thought that he would be getting a commission from her and that Coney Realty would be the managing agent for the Linden properties if she purchased these properties through him.
Thereafter, over the course of several weeks, Haas provided Swieca, through Fallon, as well as others in her organization, with income and expense information, the rent roll, and other relevant information. According to Haas, he also provided Swieca with several years of DHCR filings, but this is denied by Swieca. Haas personally showed Swieca the Linden properties twice, once by herself and once accompanied by her husband and one of her sons. Haas also spent many hours on the phone with Swieca discussing the Linden properties. Haas and Rebenwurzel assert that Hering acted as a facilitator between Haas and Swieca and participated in many of the conversations between them regarding the proposed transaction with respect to the purchase of the Linden properties. Hering confirms that she acted as a facilitator, conferring frequently with Swieca, but the extent of her participation in conversations between Hass and Swieca is uncertain.
Haas admits, however, that he never informed the sellers that he was negotiating on behalf of Swieca and that he never mentioned her name to them (Haas' Dep. Transcript at 100). He further admits that he never told the sellers that he was acting as a broker on behalf of Swieca (Id. at 124). He also admits that it was possible that the sellers thought that he was negotiating on behalf of Rebenwurzel (Id. at 100). According to Neuman, Haas assured him that he was acting only as a principal and not as a broker, and that if he had known that Haas was acting as a buyer's broker, he would not have spoken to him because he did not want any brokers involved in the deal. Neuman attests that Haas made it sound like he was representing a “fund” in which Rebenwurzel or he was a part. E-mails submitted in support of defendants' motion corroborate such representation by Haas.
Towards the end of December 2012, Haas attempted to persuade Swieca to make a decision about purchasing the Linden properties, and Swieca informed Haas that she was only interested in them if she could purchase them for around $36 million. According to Haas, without mentioning Swieca, he asked Neuman if a deal could be done at $36 million (Haas' Dep. Transcript at 98, 101). However, the lowest offer that the sellers were willing to entertain at that time for the Linden properties was 10 times the gross rent, which was in the range of $38 million to $39 million. According to Haas and Rebenwurzel, Swieca advised them that the asking price was too high at that level, and that, therefore, she was not interested in purchasing the Linden properties.
Haas attests that he “threw out the idea” to either Swieca or the seller of offering to purchase only one of the two Linden properties, but Swieca's issue was the gross rate multiplier and the price per unit, and buying one of the Linden properties would not change anything (Haas' Dep. Transcript at 117–120). Swieca claims that Haas never told her that he made any attempt to negotiate the purchase of only one out of the two Linden properties for her, but told her that the sellers were selling them as a package and would not sell just one building (Swieca's Dep. Transcript at 110). According to Swieca, she discussed the Linden properties with Haas until at least December 26, 2012.
Rebenwurzel and Haas assert that once it became apparent that Swieca's interest in the Linden properties was waning, they proceeded to try to get another group of investors interested in purchasing them, and even considered buying into the transaction with this group of investors. Haas contacted Barry Katz (Katz) regarding the Linden properties by e-mail sent on December 26, 2012, in which he expressed that he was seeking investors to purchase the Linden properties (Haas' Dep. Transcript at 132; Katz's Dep. Transcript at 36). Katz then brought the Fruchthandler Group to Haas, and Katz acted as the intermediary between Haas and the Fruchthandler Group to try to negotiate a deal. Haas conducted negotiations between the sellers and this second group from early January 2013 through the middle to end of that month without success.
In a December 31, 2012 e-mail, Haas informed Neuman that “[t]he fund [had] got [ten] back to [him that day],” and that they were “ready to raise their offer to $37.5M,” and that Rebenwurzel was holding at $37,750,000 even though it was over $130k per unit. On January 7, 2013, Haas wrote an e-mail to Neuman stating that he would like to discuss the pricing on the deal “to see where [he] could push up [Rebenwurzel] to make a deal happen,” that Rebenwurzel was at $37,750,000, and that he felt that he was “ready to come up a bit to make a deal.” The Fruchthandler Group, at some point, made an offer for the Linden properties. In a January 17, 2013 e-mail to the sellers, Haas stated that “one of our equity partners [i.e., the Fruchthandler Group] that had took [sic] an initial step back ha[d] now come back very strong,” that they had “made it very clear that the only way this gets done is at $39M,” and that “the closing w [ould] take place in [five weeks].” According to Neuman, Haas informed him on January 24, 2013 that no deal could be done. Swieca asserts that she had one final contact with Haas in mid-January 2013, when he called her to ask if she was still interested in the Linden properties. She responded that nothing had changed from the price that she was willing to pay.
On January 25, 2013, Swieca met the sellers in connection with another property that they were selling and the Linden properties came up in discussion. Defendants declined to discuss the property at that time, but, on January 28, 2013, Swieca and her husband met with Neuman in their office. These discussions culminated in a deal for the sale of the 201 Linden property for approximately $18.3 million. According to Neuman, until the January 28, 2013 meeting, he and Weinberger had not considered selling the Linden properties separately.
In early February 2013, Rebenwurzel received a telephone call from Hering, who advised him that she had just learned that Swieca had gone to contract on the 201 Linden property. On February 8, 2013, Fallon told Swieca that Hering had called her and informed her that Coney Realty was demanding a brokerage commission.
On February 28, 2013, Swieca closed on the purchase of the 201 Linden property through her related entity, Linden Partners, which was formed by herself and her husband for the purpose of purchasing the 201 Linden property. The purchase price for the 201 Linden property was $18,351,550, which was ten times the rent roll of this property. During Swieca's prior negotiations with Haas, she had previously expressed to him that she was only willing to pay around 7.5 to 8.5 times the rent roll. Rebenwurzel and Haas contend that if Swieca had made that offer during the time that they were involved in the negotiations with the sellers, the sale would have been consummated.
Rebenwurzel maintains that, based upon the agreement with Swieca as contained in the Third Confidentiality Agreement and in subsequent communications, Coney Realty is entitled to receive a brokerage commission. Rebenwurzel asserts that Coney Realty never expected to receive a commission from the sellers, but only a buyer's commission from Swieca. Swieca has refused to pay Coney Realty any commission. Rebenwurzel also asserts that Swieca was required to hire Coney Realty as her management company and pay it a management fee, and that he is entitled to damages based on her breach of the Third Confidentiality Agreement.
On May 22, 2013, Rebenwurzel, d/b/a Coney Realty, commenced this action against Swieca and Linden Partners. Rebenwurzel's complaint asserts three causes of action. His first cause of action alleges a breach of the agreement to pay him a brokerage commission, and seeks to recover a brokerage commission in the amount of $367,000. He asserts that this $367,000 commission is based upon two percent of the purchase price, which would be $367,031. He inexplicably predicates his entitlement to a two percent commission on the December 18, 2012 e-mail by Haas, which had actually stated that, while Coney Realty usually would take two points on the deal, Rebenwurzel felt that 1.25 was a fair number.
Rebenwurzel's second cause of action alleges a breach of the agreement to pay him a management fee. While Rebenwurzel's second cause of action alleges damages in the amount of at least $900,000, he asserts that he is seeking, by this cause of action, to recover a management fee in the amount of $7,169.86 per year based upon 4.75% of the gross rent roll, as requested by Haas' December 18, 2012 e-mail.
Rebenwurzel's third cause of action seeks damages of at least $367,000 for breach of the Third Confidentiality Agreement based upon the alleged dissemination of the confidential information regarding the Linden properties. Specifically, Rebenwurzel asserts that while the Third Confidentiality Agreement required Swieca to use the confidential information regarding the Linden properties only for the purpose of evaluating entering into a business arrangement with Coney Realty, Swieca used the information regarding the Linden properties to enter into a business transaction independent of him, rendering her liable for the lost brokerage commission and management fee.
Swieca and Linden Partners interposed an answer dated July 22, 2013. Discovery has taken place, including depositions. On September 9, 2015, Rebenwurzel filed his instant motion for summary judgment, and Swieca and Linden Partners filed their motion for summary judgment.
DISCUSSION
In support of his motion, Rebenwurzel notes that “[a] real estate broker is entitled to recover a commission upon establishing that it (1) is duly licensed, (2) had a contract, express or implied, with the party to be charged with paying the commission, and (3) was the procuring cause of the sale' “ (Hentze–Dor Real Estate, Inc. v. D'Allessio, 40 AD3d 813, 815 [2d Dept 2007], quoting Stanzoni Realty Corp. v. Landmark Props. of Suffolk, Ltd., 19 AD3d 582, 583 [2d Dept 2005] ). He points out that he, Haas, and Coney Realty are duly licensed. He further claims that Coney Realty had a contract with Swieca, and that this contract is documented by the Third Confidentiality Agreement and the supporting e-mails. He asserts that Coney Realty, via Haas, showed Swieca the Linden properties twice, disseminated information to her, and devoted time and energy to her over an approximately two-week period in order to get her to agree to a deal with the sellers. He contends that Swieca breached the agreement to pay Coney Realty a brokerage commission because, while she stated that she was not interested in purchasing the Linden properties for more than $36 million, which was equal to either 7.5 or 8.5 times the rent roll, her related entity, Linden Partners, ultimately purchased one of the Linden properties for an amount equivalent to ten times the rent roll. He maintains that this shows that Coney Realty was the procuring cause of the sale and entitles him to summary judgment on his first cause of action.
It is well established, however, that “[b]efore the power of law can be invoked to enforce a promise, it must be sufficiently certain and specific so that what was promised can be ascertained” (Joseph Martin, Jr., Delicatessen, Inc. v. Schumacher, 52 N.Y.2d 105, 109 [1981] ). Indeed, “definiteness as to material matters is of the very essence in contract law,” and “a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable” (id. ). Here, the purported brokerage terms of the Third Confidentiality Agreement stated that the brokerage fees “are to be negotiated by the parties.” Thus, since this agreement provided for a brokerage commission at a rate to be negotiated, it is lacking an essential term as to the amount of the commission and, as such, constitutes an unenforceable agreement to agree (see Zere Real Estate Servs., Inc. v. Adamag Realty Corp., 60 AD3d 758, 760 [2d Dept 2009] ; Parkway Group, Ltd. v. Modell's Sporting Goods, 254 A.D.2d 338, 339 [2d Dept 1998] ). In fact, Haas, at his deposition, acknowledged that the Third Confidentiality Agreement was “an agreement to agree” (Haas' Dep. Transcript at 105, 177).
Although Rebenwurzel's complaint did not allege an oral agreement for a brokerage commission, but, rather, alleged that the Third Confidentiality Agreement provided for a brokerage commission and was breached by Swieca, Rebenwurzel, in opposition to Swieca and Linden Partners' motion, now argues that the brokerage agreement was oral. He then relies upon General Obligations Law § 5–701, which provides that a contract to pay compensation to a licensed real estate broker is not required to be in writing. He contends that the terms of the oral agreement for a brokerage commission were confirmed by the Third Confidentiality Agreement and the subsequent December 18, 2012 e-mail by Haas regarding the amount of the commission, as well as various conversations among Swieca, him, and Haas.
Swieca and Linden Partners, in reply, point out that paragraph 8 of the Third Confidentiality Agreement contained a general merger clause which provided that “this Agreement constitutes the entire understanding between the parties hereto as to the subject matter hereof and merges all prior discussions between them related thereto .” This precludes Rebenwurzel's reliance upon any prior oral agreement between the parties on the same subject matter.
Although it is true that a subsequent negotiation of the brokerage fee was contemplated by the preamble of the Third Confidentiality Agreement, paragraph 10 of the Third Confidentiality Agreement provided that “[n]o amendment or modification of this Agreement shall be valid or binding on the parties unless made in writing and signed on behalf of each of the parties by their respective duly authorized representatives.” Thus, the terms of the Third Confidentiality Agreement could not be changed without a signed writing (see General Obligations Law 15–301[1] ; Nassau Beekman LLC v. Ann/Nassau Realty LLC, 105 AD3d 33, 39 [1st Dept 2013] ). Haas' December 18, 2012 e-mail, in which he stated that Rebenwurzel “felt that 1.25 [points] was a fair number” for a brokerage commission (although he inconsistently now seeks a two percent commission) was not signed by Swieca. While Swieca maintains that she never orally assented to the terms of this December 18, 2012 e-mail or reached any other oral agreement to pay Coney Realty a brokerage commission, it is undisputed that there is no signed writing by Swieca agreeing to pay a two percent or 1.25 point brokerage commission.
Moreover, paragraph 4 of the Third Confidentiality Agreement contains terms which flatly contradict the preamble in providing that this Agreement did not “constitute or imply any promises or intention to make any purchase of products or services by either party or its affiliated companies ... or to enter into any business arrangement.” These terms evince the parties' stated intention that the Third Confidentiality Agreement would not constitute a promise to enter into a business arrangement, such as a brokerage agreement to pay a fee for brokerage services, or to engage plaintiff as a “managing agent” under unspecified terms. Thus, the Third Confidentiality Agreement is “internally inconsistent in material respects ... invoking strict construction of th[is] contract in the light most favorable to the nondrafting party [i.e., Swieca]” (Natt v. White Sands Condominium, 95 AD3d 848, 849 [2d Dept 2012] ).
Rebenwurzel argues, however, that he did not consider the Third Confidentiality Agreement to be a brokerage agreement, but, rather, considered it to be a confirmation of the fact that Swieca had agreed to an oral brokerage agreement. He contends that the terms of the Third Confidentiality Agreement are, therefore, not relevant to the existence of a prior oral brokerage agreement. As previously discussed, however, the merger clause in the Third Confidentiality Agreement precludes Rebenwurzel or Coney Realty's reliance upon any prior understandings or agreements as to an oral brokerage agreement.
Rebenwurzel also argues that paragraph 4 of the Third Confidentiality Agreement can be interpreted to acknowledge that the person receiving the confidential information was under no obligation to purchase the property. The language of the Third Confidentiality Agreement, however, does not support such a narrow construction since it refers to the lack of any promise with respect to the purchase of any “services by either party” or “to enter into any business arrangement.”
In any event, even assuming that there were subsequent oral negotiations between the parties in which Swieca agreed to pay Coney Realty a brokerage commission which could raise a triable issue of fact, as contended by Rebenwurzel, the determination of other issues is dispositive of the instant motions as a matter of law. Specifically, a critical issue is whether Coney Realty, which claims to have acted as a buyer's broker for Swieca (through Coney Realty), breached its fiduciary duty to Swieca by essentially competing with her for the purchase of the Linden properties.
The Court of Appeals, in Dubbs v. Stribling & Assoc. (96 N.Y.2d 337, 340 [2001] ), noted that “a real estate broker is a fiduciary with a duty of loyalty and an obligation to act in the best interests of the principal” (see also Precision Glass Tinting, Inc. v. Long, 293 A.D.2d 594, 594 [2d Dept 2002] ). While “[t]he broker/principal relationship and accompanying fiduciary duty can be severed by agreement of the parties or by unilateral action of the principal” (Dubbs, 96 N.Y.2d at 340 ), the Court specifically held that “[w]here a broker's interests or loyalties are divided due to a personal stake in the transaction or representation of multiple parties, the broker must disclose to the principal the nature and extent of the broker's interest in the transaction or the material facts illuminating the broker's divided loyalties” (id. ). “[T]he disclosure to be effective must lay bare the truth, without ambiguity or reservation, in all its stark significance” (Id. at 340–341 [internal quotation marks omitted] ).
In Rivkin v. Century 21 Teran Realty LLC (10 NY3d 344, 355 [2008] ), the Court of Appeals, observing that while Dubbs had addressed the duties of sellers' brokers, rather than buyers' brokers, held that the Dubbs ' ruling that “[w]here a broker's interests or loyalties are divided due to ... [the] representation of multiple parties, the broker must disclose to the principal ... the material facts illuminating the broker's divided loyalties' bears on agency relationships generally” (quoting Dubbs at 340). It thus found that the principles enunciated in Dubbs were equally applicable to buyers' brokers (Rivkin, 10 NY3d at 355–356 ). Specifically, it held that “representing multiple buyers with respect to the same property is inconsistent with these duties, absent disclosure and consent” [because] “[a]n individual buyer's agent acting on behalf of multiple clients bidding on the same property cannot negotiate an optimal purchase price for all of them” since “[t]he buyers' interests conflict [and] the agent's representation is inevitably compromised” (Id. at 356 ). The Court ruled that “[a]n individual agent ... may not represent multiple buyers bidding on the same property without making disclosure and obtaining consent (Id. at 357 ).
Thus, a buyer's broker cannot seek to purchase property for someone other than its client, much less for himself, and, at the same time, seek to purchase the property for its client since “[d]uring the process of facilitating a real estate transaction, the broker owes a duty of undivided loyalty to its principal” (Douglas Elliman LLC v. Tretter, 84 AD3d 446, 448 [1st Dept 2011], affd 20 NY3d 875 [2012] ; see also Dubbs, 96 N.Y.2d at 340 ). “If this duty is breached, the broker forfeits his or her right to a commission, regardless of whether damages were incurred” (Douglas Elliman LLC, 84 AD3d at 448 ).
The court notes that in Rivkin (10 NY3d at 353 ), the Court of Appeals cited to Real Property Law § 443(3)(c) and (4)(a), which expressly require, due to the fact that a real estate broker acts in a fiduciary capacity, that a buyer's broker provide a written disclosure form to the buyer prior to entering into an agreement to act as such and to obtain a signed acknowledgment from the buyer. While these sections are only applicable to residential properties, the common-law principle regarding a broker's fiduciary duty to the buyer, which Real Property Law § 443 embodies, is equally applicable in the commercial context. In fact, the Court of Appeals observed that this statutorily prescribed fiduciary duty is consistent with the fiduciary duty established under the common law (Rivkin at 356).
Here, while Coney Realty (including Haas) claimed to be Swieca's broker on December 28, 2012, even as Swieca stated that she was willing to pay $36 million for the Linden properties, Haas, in his December 31, 2012 e-mail to Neuman, stated that “the fund” was willing to pay $37.5 million and that Rebenwurzel was willing to pay $37,750,000. These were higher offers than Swieca was willing to pay and were made by Haas for the Linden properties on behalf of other clients at a time when Coney Realty was purportedly representing Swieca. As shown by Haas' January 7, 2013 e-mail, Haas subsequently indicated to Neuman that Rebenwurzel was offering $37,750,000 and that he felt that he could come up even higher to make a deal. Thereafter, as shown by Haas' January 17, 2013 e-mail to the sellers, Haas indicated that he was pushing the Fruchthandler Group to pay $39 million.
Coney Realty could not be both Swieca's broker and negotiate against her at the same time since to do so undermined her negotiating position by informing the sellers that someone would be willing to pay more than she was offering for the Linden properties. Consequently, to the extent that Coney Realty claims to have been Swieca's broker after December 31, 2012, it has forfeited any right to a commission due to a breach of its fiduciary duty to her as a matter of law (see Douglas Elliman LLC, 84 AD3d at 448 ).
Rebenwurzel, however, denies that Coney Realty was representing two competing bidders. He claims that Haas did not seek any other party who might be interested until it became evident that Swieca's interest in the Linden properties was waning and that he did not pursue any other transaction in earnest until Swieca indicated that she was not willing to meet the price required by the sellers in this transaction. However, Rebenwurzel's claim, that his relationship as Swieca's broker had already terminated at the time that he was representing other prospective buyers, undermines his claim to an entitlement to any brokerage commission.
It is well established that “[i]If negotiations between parties brought together by a broker are unproductive and the parties, in good faith, withdraw and abandon the proposed purchase and sale, a subsequent renewal of negotiations, followed by a sale at a lesser price, does not entitle the broker to a commission as the broker was not the procuring cause of the sale” (11 N.Y. Jur 2d, Brokers § 166 ; see also Leipham, Inc. v. Grosodonia, 21 A.D.2d 847, 847 [4th Dept 1964] ). “In the absence of fraud or bad faith on the part of the sellers, the broker is not entitled to [a] commission on a sale negotiated after the term of [its] employment, even though the sale is negotiated with a buyer introduced to the seller by the broker” (Bashant v. Spinella, 67 A.D.2d 1100, 1100 [4th Dept 1979] ).
A real estate broker who initially called the property to the attention of the ultimate purchaser “does not automatically and without more make out a case for commissions simply because [it] initially called the property to the attention of the ultimate purchaser” (Hentze–Dor Real Estate, Inc., 40 AD3d at 815, quoting Greene v. Hellman, 51 N.Y.2d 197, 205–206 [1980] ). “Indeed, there must be a direct and proximate link, as distinguished from one that is indirect and remote, between the bare introduction and the consummation' “ (Hentze–Dor Real Estate, Inc ., 40 AD3d at 816 [internal quotation marks omitted]; see also SPRE Realty, Ltd. v. Dienst, 119 AD3d 93, 98 [1st Dept 2014] ).
It is true that “in order to qualify for a commission, a broker need not have been involved in the ensuing negotiations or in the completion of the sale (Hentze–Dor Real Estate, Inc., 40 AD3d at 816 ; see also Buck v. Cimino, 243 A.D.2d 681, 684 [2d Dept 1997] ). However, where, as here, “ the broker is not involved in the negotiations leading up to the completion of the deal, the broker must establish that [it] created an amicable atmosphere in which negotiations proceeded or that [it] generated a chain of circumstances that proximately led to the sale' “ (Hentze–Dor Real Estate, Inc., 40 AD3d at 816, quoting Dagar Group v. Hannaford Bros. Co., 295 A.D.2d 554, 555 [2d Dept 2002] ; see also Friedland Realty v. Piazza, 273 A.D.2d 351, 351 [2d Dept 2000] ).
Here, upon the undisputed facts, it cannot be said that Haas, Rebenwurzel, or Coney Realty created an amicable atmosphere in which negotiations between the sellers and Swieca proceeded or that they generated a chain of circumstances that proximately led to the sale so as to be the procuring cause of the sale of the Linden properties to Linden Partners. While Haas was negotiating for Swieca, his efforts were not “plainly and evidently approaching success” on her behalf (see Rosenhaus Real Estate, LLC v. S.A.C. Capital Mgt., Inc., 121 AD3d 409, 410 [1st Dept 2014] ). As admitted by Rebenwurzel (and as evidenced by Coney Realty's negotiations on the behalf of the Fruchthandler Group), Coney Realty considered any brokerage agreement already terminated at the time that Linden Partners went to contract with the sellers. Furthermore, Rebenwurzel, Haas, and Coney Realty never introduced Swieca to the sellers and they were not even aware of her existence during Haas' negotiations on her behalf.
Moreover, the sale ultimately consummated between Swieca and the sellers involved only one of the Linden properties, and, thus, such sale was not on the same terms as had been presented by Haas to the sellers. It is undisputed that Haas never conveyed to the sellers any offer by Swieca to purchase just one of the Linden properties. Thus, Rebenwurzel cannot establish the requisite direct and proximate link between his efforts and the deal ultimately consummated, and has failed to demonstrate that he, through Haas, was the procuring cause of the purchase of one of the Linden properties by Linden Partners (see Rosenhaus Real Estate, LLC, 121 AD3d at 409 ; SPRE Realty, Ltd., 119 AD3d at 95 ; Jagarnauth v. Massey Knakal Realty Servs., Inc., 104 AD3d 564, 565 [1st Dept.2013] ).
Rebenwurzel argues, however, that Swieca acted in bad faith because she ultimately closed the transaction for ten times the rent roll for 201 Linden alone despite the fact that she had stated to Haas that she was not interested in doing the deal for both properties for more than $36 million, which was either 7.5 or 8.5 times the rent roll for the two properties. This argument must be rejected since the price which Haas was offering the sellers was based upon both Linden properties and, as previously discussed, he never communicated to the sellers any offer for just one of the Linden properties. Significantly, Swieca asserts that the sellers provided her with all new updated information, including expense information broken down by building, which had not been provided to her by Haas. Furthermore, there is no showing that Swieca affirmatively misled Rebenwurzel or Haas in any way with respect to what she was willing to pay in order to deprive Coney Realty of a commission (compare Buck, 243 A.D.2d at 685 ). Thus, Swieca and Linden Partners are entitled to summary judgment dismissing Rebenwurzel's first cause of action for a brokerage commission (see CPLR 3212[b] ).
With respect to Rebenwurzel's second cause of action for a management fee, Rebenwurzel argues that the Third Confidentiality Agreement required Swieca to hire Coney Realty as its managing agent “in the event that [Swieca] closes on these buildings,” i.e., the Linden properties, and that she failed to hire it in breach of this agreement. Inasmuch as the court finds that Coney Realty did not procure the sale of the 201 Linden property and since Swieca did not close on both buildings as provided in the Third Confidentiality Agreement, Swieca could not be required to hire Coney Realty as her managing agent or to pay it any management fee. Moreover, as the provision upon which plaintiff relies lacks the particulars as to terms of such a relationship, it is not an enforceable contract. Therefore, summary judgment dismissing Rebenwurzel's second cause of action is mandated (see CPLR 3212[b] ).
As to Rebenwurzel's third cause of action for breach of the Third Confidentiality Agreement, Rebenwurzel asserts that the Third Confidentiality Agreement provided that Swieca would hold the confidential information given to her regarding the Linden properties in confidence and would use it only for the purpose of evaluating entering into a business arrangement with Coney Realty. He contends that Swieca, in breach of this agreement, used the confidential information given to her to acquire the 201 Linden property, which did not constitute entering into a business arrangement with Coney Realty. This argument is unavailing since Swieca did use the information to evaluate whether to enter into a business arrangement with Coney Realty, notwithstanding that this did not result in a sale that was procured by Coney Realty, and Rebenwurzel has not made any showing that Swieca disseminated such confidential information to any third party. Linden Partners is wholly owned by Swieca and her husband, and Haas had given the confidential information regarding the Linden properties to both of them. Furthermore, Rebenwurzel has not shown how he has suffered any damages with respect to this claim, but only alleges the loss of a brokerage commission and a management fee which, as discussed above, cannot be recovered by him. Consequently, summary judgment dismissing Rebenwurzel's third cause of action is warranted (see CPLR 3212[b] ).
CONCLUSION
Accordingly, Rebenwurzel's motion for summary judgment in his favor is denied, and Swieca and Linden Partners' motion for summary judgment dismissing Rebenwurzel's complaint as against them is granted.
This constitutes the decision, order, and judgment of the court.